I'll be the first to admit that an overvaluation argument is easy to make with crypto. At the same time, all the major ones have an asymptotic cap on circulation so there will be a point where there isn't more of it. You can't even say that about gold and you certainly can't say it about fiat currency. For transactional purposes it's easy to move down a few decimal points to get shit done but if your holdings are up a few decimal points, you win. Current utility of cryptocurrency is a tricky one and if you judge bitcoin by what you can do with it, it's nonsense. But then, if you judge Tesla stock by what you can do with it, it's nonsense, too.

I was watching the Steelers game yesterday. I saw four different commercials in which different companies were talking about their "blockchain" technologies - IBM, Cisco, not sure who else.

This boat can crash. It almost certainly will. But I think we're past the point of beanie babydom. We've gone from $200b to $800b market cap.... in 90 days. It's funny how all the prognosticators who use "too big to fail" for every bank failure totally think that the more people who pour money into crypto, the harder it's going to fall.

Current utility of cryptocurrency is a tricky one and if you judge bitcoin by what you can do with it, it's nonsense.

That's mostly true for privately held gold, too. Gold has some utility, and it's possible some privately held gold eventually makes its way into industrial processes or jewelry, but mostly it's just exchanged between individuals who agree the market price (defined by fiat) is the fair price and exchange the item and fiat.

That's a side of crypto I haven't been able to process. It seems the only thing that matters is its value in fiat. Is that a bad thing? I don't think it is. If the dollar were to be weaker compared to the euro, it has little effect on the bitcoin value as it's priced in all currencies (or at least all major currencies).

To me, that's the utility of crypto (which Swype wanted to make froyo). It's a currency that's balanced with all currencies. But how does one value such a thing? Gold can be valued by the cost of mining it. There doesn't seem to be a similar function with crypto.

I think if that were the case the Chinese wouldn't be so big into it. Realistically speaking, crypto is a numbered Swiss bank account whose interest rates are radically unpredictable.

Presume the sole purpose of Bitcoin is to transact off the record. It is solely a marker for black market transactions. If 10% of all black market transactions were to transact in BTC, and all 21 million BTC were used to do that transacting, then 1 BTC has a nominal value of $28,000. If 100% of all black market transactions, 1 BTC has a nominal value of $285,000. At a circulating supply of 17 million BTC, worth $15,000 each, bitcoin only has the capacity to cover 2% of the black market.

I don't think this is an answer. I think this demonstrates that we don't know enough to begin to ask the question.

I was mostly being facetious. Probably in part because I missed the boat, or at least all the current ones.

I'm not that clued up on the nuances of crypto (hence the naivety of my original comment). The technology behind it seems interesting. That for certain is here to stay and I'm intrigued to see what people much smarter than I will do with it. One example I saw was using it to aid in the development of self-driving cars.

Do you have any recommendations for essential reading materials in this area? It seems every other book I read is one you've mentioned on here and I rarely regret it picking them up.

Yes, veen's excellent article covers what I already knew about the blockchain technology. It's always nice to get a refresher though.

I didn't know what made Ethereum different to Bitcoin though, so that's good to know. Now I can see what exactly Ether has that gives it much greater potential in regards to how in can be applied to different scenarios.

I think an important piece of information to remember is that most (any?) of these coins can be hard-forked - and with a strong enough marketing machine behind the hard fork, can create as many bajillion more coins that are nearly identical as the "original", pre-fork coins.

I don't know if that makes a real difference to this discussion, but I think it does. If the traditional markets, investors, businesses, and mom-pop shops continue with crypto F.O.M.O., these forked coins are likely to become manipulative tools to suck more fiat out of people.

After the Dao, I had ETH and ETC. After Segwit went dumb, I had BTC and BCH. A "strong enough marketing machine behind the hard fork" means that the value of one coin or another increases. Everybody who was in it before already has everything available. Sure, maybe they sell it to the people who don't but the way forking works is anyone pre-fork has assets on both forks.

Ah, yes - I knew that! But had forgotten. I was sure I was missing something but wrote anyways. Thank you for correcting me :)

Even so, I still feel that being able to double (or whatever the fork decides) the amount of "valid" coins in circulation - even if they're forked coins, on a different mining network, with different code, etc. etc. etc. - with a 'simple' fork critically undermines the claim that cryptocurrencies (bitcoin in particular) and their holders will benefit from deflationary supply. Which means that we end up trusting each other that forked coins won't be dumped into markets, or used to manipulate systems, and then we end up back where we started - having to trust that people won't fuck with the "trust-less" blockchains.

Let's say there's 100 miners mining HubskiCoin. There's a fight amongst the factions because some people think the color scheme should be "clean" while some think it should be "asphalt." So there's a fork - 35 of them go and mine "asphalt" while 65 of them mine "clean."

Everybody with holdings in HubskiCoin now has 35% of their holdings in HubskiDark. Even the guys mining HubskiDark still hold all their HubskiCoin. But now their mining efforts are being rewarded in HubskiDark, not HubskiCoin. Their pool is 35. HubskiCoin only has 65 miners but they represent the majority stake. If they can attract new miners, they have a bigger network. But look -

If HubskiDark attracts seven miners and HubskiCoin attracts seven miners, there's 114 miners. You don't get to double-mine. Every single miner could fork off the network and there'd still only be 100 miners. Mining capacity does not change. Total hash of all combined networks is the same as total hash of the pre-forked network. It's not like everyone gets to summon network availability out of thin air.

Forks are very different than ICOs - most every ICO out there is effectively a "subroutine" running on the Ethereum "program." Their hashes and shit are part of the payload of Ethereum mining.

A friend decided to calculate my ROI as a percentage. He said "that's not a profit, that's a typo."

What's funny is conventional investors will tell you to stay the fuck away from forex because the combination of volatility and leverage will fuckin' kill you. The volatility of forex is a couple orders of magnitude less than crypto.